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Conrad Black: The Saudis Fear Western Alliance With Iran; Crashing Oil Is Their Retaliation
Authored by Conrad Black via The National Post,
Responses to the decline in world oil prices have been mystifying — flummoxing, in fact. The secretary general of OPEC (the Organization of Petroleum Exporting Countries), Abdullah Al-Badri, said last week that speculation was to blame for the decline by 15% since the last increase in production. He ceremoniously denied that there was any attempt by the cartel to discourage production from shale or oil sands, or to put political pressure on Iran or Russia. In general, the world’s media have bought into the theory that discouragement of production from new sources that would reduce oil imports, especially by the United States, is the real reason for increased production and reduced price.
But Al-Badri has a limited mandate to give the agreed official line of OPEC and has no authority to speak for the motives of the individual member states, and even less standing to mind-read the authorities in those countries and speak for them. OPEC is a slippery cartel at the best of times, many of whose members are virtually, if not actually, at war with each other; the member states don’t necessarily speak truthfully among themselves and anything uttered on behalf of the whole group should be treated with caution. Some member states, including Iraq, Libya and Nigeria, do not really speak for the oil-exporting regions in the country, and there are many other oil-producing countries that either do not export, or even if they do, are not in OPEC, including Canada, Australia, Norway, the United Kingdom and the United States.
The explanation of speculation is nonsense, as no sane speculator would encourage the sale of oil at less than its real market value other than to himself, and where the claimed OPEC production is 30 million barrels a day, no unofficial speculation would cause the sort of gyrations in oil prices that have occurred. In general, the decline in China’s rate of economic growth, and conservation and alternate energy-encouragement measures in much of the West and the steady advance of increased domestic production in the United States, explain much of the price reduction. But there is no doubt that Saudi Arabia, as the world’s leading oil exporter, has increased production, whether it is advising Mr. Al-Badri of it or not, and there is no doubt that its motives are chiefly political.
Saudi Arabia has resigned itself to the fact that neither its oft-demonstrated ability to play the periodic U.S. resolve to reduce its dependence on foreign oil like a yo-yo by price-cutting until the impulse of self-discipline passes, nor the agitation of the environmentalists for restrained oil production, will work again. (Shale-sourced oil is relatively environmentally friendly.) President Eisenhower warned over the Suez crisis in 1956 of the dangers of relying on foreign countries for 10% of America’s oil supply; President Nixon did the same in 1973 during the Arab oil embargo, when the percentage of U.S. oil needs provided by imports had risen to 20%. In the late 1980s, President Reagan arranged for the Saudis to over-produce to bring prices back down by half, by selling Saudi Arabia advanced AWACS reconnaissance aircraft and America’s best interceptor jets and sophisticated air-to-air weapons systems. This was part of Reagan’s plan to squeeze the Soviet Union’s foreign exchange sources while spending them to the mat with his Strategic Defense Initiative. The nature of these arrangements really only came to light in the memoirs of some of those involved on the American side about 20 years later.
The principal impact of the reduction in world oil prices from around US$100 a barrel to the mid-50s, and of the cost of gasoline at the pump in the United States from $4.00 to about $2.60, has been severe pressure on the Russian currency (a 50% reduction against the dollar and euro), and the country’s whole financial system, causing severe inflation and drastic interest-rate increases in the usual effort of desperate regimes to maintain a semblance of a believable currency. The Russian ruble has never been a hard currency, even in the piping days of the Romanovs, and that country under Putin is, in economic (and some other) terms, not many rungs above a thugdom of the president and his cronies.
But oil speculators operating on their own accounts do not cause the Kremlin to put Holy Mother Russia on the rack of multi-point daily interest rate increases, causing large protests and some public disorder. This is a Saudi move that has ramified very seriously in Russia, far beyond its impact on new oil extraction techniques in the U.S.
If a $50 price is reached and maintained, it would negatively alter but not destroy the economics of heavy oil and probably reduce somewhat shale activity, where reserves are more quickly exploited and harder to estimate than traditional subterranean oil fields, even those that are off-shore. But a Saudi move on this scale, with the resulting self-inflicted reduction in their income, makes no sense for the marginal impact it will have on American future production and imports; it is a geopolitical move targeted much closer to home.
Al-Badri’s flimflam, for which there is much precedent in the history of OPEC (essentially, the cartel is a perpetual quarrel among thieves pretending to be price-fixing), naturally seeks to disguise the fact that Saudi Arabia is trying to discourage the use of Iranian and Russian oil revenues to prop up the blood-stained and beleaguered Assad regime in Damascus, to finance Iran’s nuclear military program, and to incite the continuing outrages of Hezbollah and Hamas in Lebanon and the Palestinian Territories against Israel. The exotic community of interest that has suddenly arisen between the historically Jew-baiting Saudis and the Jewish state is because the countries in the area fear, with good reason as far as can be discerned, that the UN Security Council members, plus Germany, may be on the verge of acquiescing in Iran’s arrival as a threshold nuclear military power. The oil-price weapon, in the face of the terminal enfeeblement of the Obama administration, is the last recourse before the Saudis and Turks, whatever their autocues of racist rhetoric, invite Israel to smash the Iranian nuclear program from the air.
It is perfectly indicative of the scramble that ensues when a mighty power like the United States withdraws, fatigued but undefeated, from much of the world, that Saudi Arabia, a joint venture between the nomadic and medieval House of Saud and the Wahhabi establishment that propagates jihadism with Saudi oil revenues, makes common cause with Israel in a way that inadvertently relieves much of the Russian pressure on Ukraine, which was not an objective in Saudi calculations at all. From the Western standpoint, this is a lucky bounce of the political football. But it is Saudi judgment of its self-interest opposite the contending factions in Syria and the hideous prospect of a nuclear-armed Iran that is discommoding the Saudi leaders, not the ineluctable exploitation by the United States of its own oil resources. It need hardly be added that any conventional definition of “speculation” has nothing to do with it; nor that the Western panic at the bonanza of a $500-billion reduction in the West’s energy costs or the obdurate failure of most Western commentators to understand the implications of the oil price reduction, are an unflattering reflection on the financial and political acuity of the pundits of our society.
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Selling oil when prices drop will hurt all competitors with higher production costs, which is good for the House of Saud in the longer run, even if they relish hurting some more than others.
It's all good...
Queue an attack on one of the Saudi oil choke points in 1, 2, ...
Saudi's have a import pipeline of their own: nuclear weapons from Pakistan.
I got one thing to say to America: ROAD TRIP!!
...while you still can afford it.
I noticed that the average speed on the highway went from about 105 km/h before the oil crash to about 115 km/h now.
More like Israel and the Saudis fear a functional Iran after the West is destroyed by its fiat currency system.
Think ekm said something of this sort regarding the saudis.
Btw, could it be that the saudi reserves of oil is dwindling or were drastically overstated such that they dont care if oil tanks? Of course oil tanking impacts Iran and Russia mkrs, which turns out to be America's enemies.
For those that aren't sure, this is a ~1 hour PBS (Au - haha) special on oil ... very well done and covers basics folks need to have their minds around to appreciate implications for themselves (or their grand children).
http://www.abc.net.au/science/crude/
If you like to read books, buy (1) Oil 101 by Downey and (2) the "* in non technical language" from Penwell Publishings (where * is oil/gas/refining/LNG/etc). Very well done and it provides deep insights for those with "gumption" or a modest education.
I consider myself informed and my retirement goal is a flushing pot, three hots, and a warm cot. I hope my wife hangs in there with me.
Regards,
Cooter
You are looking for a co-ed prison?
Saud makes profit at $20/barrel. Who else can say that?
Although it may be true that Saudi makes a profit at US$20 a barrel (debatable today), what matters is the cost and investment structures that have been created by Saudi when the price of oil was at $100
Here is some tangentially interesting information on Saudi
Saudi is a country of approximately 22 million individuals. They have about 4 cities worthy of the name. It is a desert country that produces nothing neither intellectually nor, indeed, anything economically viable. Yet, Saudi consumes as much oil as Germany or South Korea in absolute terms (not per capita)
The Royal family expands by leaps and bounds. Marriages by even minor princes create broods of several princlings whom all draw state stipends of great magnitude. We are not talking $5000 a month here.
Shortly after Gulf War I, the USA moved significatn chuncks of their military command and control infrastructure to Qatar
Western refining capacity is, by and large, geared to process light sweet crude. The only light sweet crude in any significant quantities left globally is to be found in Basra (Iraq), Libya and Nigeria (Bonny Light)
In the past 10 years Saudi has fluctuated between 4th to 8th place as supplier of crude to the USA which is by far the largest consumer of oil in the world
For the past 3 years, the Saudi government has been busy tightening the fiscal screws on all local business and commerce INCLUDING on large companies owned by prominent princes
***
In my estimation, the current drop in oil prices is as damaging to Saudi finances as it is to any other country with the added risk that a diminished capacity to quell internal dissent represents for Saudi
I further estimate that if the price of crude stays at these levels for six months or more, Saudi may experience a significant socio/political event
Janitor in a Drum
Lower oil prices hurts US. All oil derivatives are sitting at around 90, 85% of recent increase in oil is from Fracking which has much higher cost basis. This oil crash, is hurting the oil/petrol elite in US, more than anyone. Imagine pressure fed gov getting from oil lobbies right now.
This will put pressure on rest of world to reconsider USD as reserve currency, probably final nail in USD as global trade standard.
Maxter, can you convert that to the King's English for me?
Here in the U.S. West, even at $4.00+/gallon, truck and S.U.V. drivers were flooring it away from the stoplight and speeding.
If you are a good auto mechanic in the U.S. you will never be unemployed and should be well paid.
Trust your mechanic
About 65 mph to 71 mph now.
The Saudis have been pumping those fields hard,especially their main field Ghwar, for 60+ years. Before they kicked out the Americans, the USA oil companies over pumped and may have damaged the wells. The Saudi lackeys who took over did the same thing.
Their oil wells may be dying. The USA and UK, according to Dr. Jim Willie, are stealing their gold in London to tried to hide all the theft and rehypothecation. A USA pivot to Iran would only be due to Saudi wells dying rapidly.
A few books have been out on the subject - one was excellent (name escapes me but it's been out for a while). They state that the Saudis haven't found any NEW fields since the 1960's, thst the few megafields that account for almost all of Saudi production HAVE been pumped hard and abused tremendously. Ramping up production only further degrades these fields. The House of Saud may be having some problems facing the long term - a spoiled population used to being bribed but the source of funds to do the bribing is limited and declining.
It's very possible London has 'leased'/sold Saudi gold out from under them but one has to wonder about what's REALLY transpired over the years. The Saudis may have more gold than we thought. Nobody ever asks WHY the Saudis put up withthe petrodollar - especially when the US reneged on its deal and supported the establishment of Israelafter WWII. It's not JUSST about the US 'defense' of Saudi Arabiaso what's been going on since the oil crisis?
When you hear rumors about US gold in Ft. Knox being 'replaced' in the early 80's with tungsten cored fakes.... could the US have been so stupid to figure gold really is a 'barbaric relic' and cut a deal to pay the Saudis under the table in gold to insure an oil supply? LOTS of past precedence with the Saudis ONLY accepting gold in payment for anything in the past. One deal during WWII was sealed with a chest of British Sovreigns.
Could it be that with Western (US) PHYSICAL gold supplies running low - and the Saudis suspecting they've been screwed on the gold they left in London, with the US failing to rein in Iran, Iraq a clusterfuck and Syria NOT being 'handled'... could it be that the Saudis feel WTF? Pump like mad now - kill US shale and then ramp up prices to make up their shortfall?
You mean Matthew Simmons' 'Twilight in the Desert'?
Newsboy said: "Selling oil when prices drop will hurt all competitors with higher production costs, which is good for the House of Saud in the longer run..."
Yup. It is not in their interests to make shale mining in the U.S. more profitable, especially not when the Royalty is threatened by Islamic extremists.
They may not be able to survive without U.S military help, so making their supply relevant by crushing the shale "miracle" keeps them in the stable of U.S. "concerns".
When China is the pre-eminent military and world power the Saudi's will dump the U.S. like last week's girlfriend; but until then they will make certain their supply and influence is felt.
Very inciteful analysis by wrongly imprisoned Conrad Black. The one flaw: behind a facade of reasonableness, insanity and greed rule the world. When he is coked up, Obama approves sending out FBI hit squads to kill people who recognized government agents who planted those Boston bombs, including those two former Navy SEALs executed on the Maersk Alabama. Putin bumps off anyone who does not play along with his cabal of oligarchs. The Clintons went from greenlighting the CIA's massive multi-ton drug running operations at the Mena, Arkansas airport (where ace drug pilot Barry Seal was rubbed out when he became too well known) to running the USA into the ground. Florida Governor Jeb Bush covered up the killing of cabbie Dirk Hale, who knew too much about Mohammed Atta (they were next door neighbors). Criminality rules the world and criminals don't think much, they just steal.
...the nomadic and medieval House of Saud...
Yes they were Mi6 controlled "tribal" Iraqis related to the Red Shield and still are.
Conrad Black is a NeoCon.
Dr. Jim Willie months ago said the US would pivot to Iran. The only reason that I can think is the USA intel and oil companies know that the Saudis old oil fields are dying rapidly.
The big oil left is in Iran, Iraq, Russia and the various stans near the Caspian Sea.
Even though I am leery of the once celebrated and famous but now infamous Conrad Black (Baron Black), his info is a lot more reliable (as an Establishment insider) than clever tea readings from otherwise smart and quirky people. Candidate Obama indicated way back on 2008 that he was open to reestablishing relationships with Iran and Cuba. Hence it was always only a matter of timing/when, not if.
He's no relation to Simon Black.
His views may be predictably biased, but his analysis of the Saudis' real intentions seems sound.
Sure. But does he care enough to know who put him in prison ?
Ego vs. ignorance is a critical context.
"Conrad Black is a NeoCon."
Would you still be a neocon after the other neocons put you in jail?
As they say, "you know who your friends are when you are in jail".
I'm not sure that 'NeoCons' were responsible for his imprisonment.
You might want to look up a couple of levels. They sometimes look the same but have different numbers.
The Road to Damascus has no GPS
It's, "Lord Black", not 'Baron Black".
Aye, I stand corrected. Even though 'The Black Baron' has a much better ring. :-)
The US has been pivoting towards Iran since Gulf War II.
Regardless the rethoric, the reality on the ground is that by "bringing democracy" to Iraq, the US deliberately dismantled the control structures that had been erected by the minority Sunni therby handing power to the Shia majority. Ergo, the US and the coalition partners deliberately gave Iran direct influence over Iraq.
I read it, I find little of real import in it. It sounds like a bit of a rant after too many drinks by someone connected to Necon Washington. Some of the political sound bites read like a deluded and unhappy zionist. Frankly, it is hardly even rational. I think he himself does not understand what he meant to convey by it. Irrational at best.
Someone clinging to the miracle of heavy oil. Not admitting that even at $50, $35 well-head, that fracking and tar mines are not viable.
A move as grave as dropping the price of oil in half in a matter of months will surely lead to something, it's supposed to and will. Bank on it.
Many layers, multiple agendas being served. Black's a worthless drunken POS, but I still expect to see at least Syria, if not Iran too, get whacked hard.
Why?
We have our cheap oil now.
Why can't we be friends with everybody?
Consider yourself lucky at least he kept it under 10 paragraphs unlike some of the recent novellas posted here
Maybe he passsed out and hit the send to Tyler button with his head. This might only be the thesis
Maybe he passsed out and hit the send to Tyler button with his head.
Kudos to FB, funniest comment for a long time, still chuckling.
But how long can $50 or $35 oil be sustained? I can't believe that it can be kept up for more than a few years, even if the Saudis pump with the pedal to the metal. If this is just a geopolitical ploy by the Saudis, as it probably is, the price will eventually go back up to normal levels in a couple of years. The shale plays and tar mines don't go anywhere. If their owners go bankrupt, the lenders get ownership, and then sell the property back to oil companies when the price of oil rises and restores its value. Shale and tar production comes back when the price rises again. The real question is who gets broken first - the Saudis or the Iranian/Russian/Syrian axis.
The real question, as you outlined, is ownership.
But I guess...that's actually the answer.
The article is raving BS. No word about the financial collateralization the shale plays serve as underlyings for These will hurt the west, not Russia. I hear the contagion a comin'.
Conjecture that misses a very important fact.
The Iranians have had nukes since around 1990, bought on the 'black' during
the demise of the Soviets.Every western intel agency knows it, and so do the Saudis and
MOSSAD.
Israel won't do squat by themselves without Uncle Scam..
What is truly amazing through all this shit is that the oil keeps flowing. From everywhere. Stable countries, unstable countries, countries embroiled in civil war.
Somebody's being played, that's for damned sure.
The spice must flow.
What happened to Peak Spice ?
They peaked in 1996 with their debute single "Wannabe". It was all down hill from there.
And if you can't figure out who it is, it's probably you.
I can't find a home for this, so post it here to be Off Topic, but topical given the possible collapse of the Minsk Agreement in Ukraine. This is just in from rebel intelligence inside occupied Donbass.
" According to information received from local residents, 83 km from Donetsk, in the village of Granitnoe, Telmanovo district, Donetsk People's Republic, English-speaking mercenaries were spotted.
According to a resident of Granitnoe Roman S., mercenaries often appear in the shops and markets, moving in small groups, they have new NATO uniforms, communicate with each other in English, bringing a translator along with them, not allowing to take photos of themselves under a threat of use of weapons."
There is a feeling that a large offensive is coming, but it may wait till May, once the West has supplied and armed the Kiev Junta. Foreign fighters are key to restoring some semblence of fighting ability to Kiev infantry and tank forces.
..they have new NATO uniforms, communicate with each other in English, bringing a translator along with them...
Someone needs to tell Givi, Motorola and Mosgovi. These f**ks spreaking English will be sorry they ever entered Donestsk. I hope they are not some American's sons but they chose to sign up.
https://www.youtube.com/watch?v=iIxpqrWFAtQ
Motorola talking about the Ukie's rotaion each day - how they rotate the dead out of the airport.
I am sure that givi and motorola already know about this.they are one step ahead so far
I remember watching on youtube about 3 months ago that a question was asked by a journalist to Zakarenchko(the president of donetsk republic) on what does he think of the ukrainian army being armed by nato.his response with a smirk on his face was let nato give weopons to the ukranian army because we will end up having them
also if their are, western mercenaries fighting for the ukrainian army all i can say is good luck.the donbass area needs some fertilizer.i am sure once the russians find out they will target them straight away.and i am sure their are a lot of ukrainian soldiers who will notify the novorussians about these people.
Zakarencko is one cool customer. He impresses me like Givi, Motorola and Mozgovi. I would not want to be fighting against those guys.
Could be timed with an Israeli offensive to clean out Gaza as it's in the way of the gas reserves. Seems like the sabotage of South Stream may well suit Israeli purposes.
Could also be a move against Lebanon.
Novakhazaria anyone?
Who gives a phuck.
Stop giving them money.
It is that simple to me.
As much as I'd like to see Russia respond in kind (send in thousands of undercover troops),
I doubt that the Kremlin has the nerve or the balls, after getting their Ruble spanked. Crimea is one thing, Ukraine is another.
Really hope I'm wrong, but my gut tells me I'm right. Simply because the US keeps ratcheting up the conflict and try to get Russia to act militarily, and Russia keeps avoiding direct action and (in the process) keeps emboldening the US and NATO.
At this rate and trajectory, it is easy to see how this game will progress: Neocons/US progressing, Russia posturing.
Remember when an attack on the Strait of Hormuz was exclusively an Iranian (or False Flag version therein) option?
Russia does not need to send troops. Many of the Ukraainian kids do not want to fight. They know this is BS and that the govt in Kiev are criminals. Novorussia has plenty of volunteers from around the world and they are very professional.
Russia may need to send better weaponry but they don't need to send troops. The Ukraine gets some new tanks and crap and they get destroyed very quickly. As someone posted here and I also saw the story, the Ukies are even getting old stuff from Chernobyl which is radioactive.
Russian border is 90 miles from Kiev. They can squash western pupets i matter of hours. No sanctions or oil price would stop that.
Problem is that they do not know what to do next, because it surely would mean split Ukraine in three.
No question that the US began delivery of manpower and supplies 2 weeks ago before Obama signed the Ukie Military Support Bill. Three airports east of Donbass were closed to civilian traffic for the military planes to land. The US covert support was already out of the bag with the release of this little gem:
http://cyber-berkut.org/en/
The US has not been particularly subtle about it's meddling in Ukraine's sovereignty:
http://youtu.be/UffhTyUcUwc
There are a lot of trains on parallel tracks.
The U.S. policy via Wolfowitz doctrine is to not allow Eurasia to form. Saudi's are part of Washington Consensus especially after the Kissinger agreement in 73 or so, when the petrodollar TBill economic system was formed. All petrodollars are to be recycled into Western Markets and banks, and Saudi's get protection and guaranteed markets. Oil is to be priced in dollars.
Our Zionist friends want the land between Tigris and Euphrates as their supposed God Given right as the chosen people. Look at their flag and Greater Israel Coins, and the images on their Bank logos if you don't believe it.
Qatar is sitting on a massive Gas Field and Iran can disturb their plans, hence Qatar is funding much of ISIS. QATAR gas is to funnel into Europe and not Russian Gas. Europe needs gas, and suppliers are jockeying to supply them. Russia is out and middle east is in. Secondary supplier is U.S. via fracking gas shipped over in cyrogenically cooled ships (yes its stupid - like a floating bomb).
Turkeys leader doesn't like Assad, but since Putin is having the south stream vector there, my guess is Turkey will back off in Syria, thus thwarting NeoCons/Israel. Also if Turkey breaks away from Nato, that is another nail in NATO's coffin.
There was also the neocon plan to knock over a number of countries via color revolutions, amongst them Ukraine and Syria. The color revolutions got their trigger point with false flag 9-11.
The house of Saud is only following orders from their Washington Consensus handlers. Saudi's cannot eat their oil, they need to trade it in markets, and they now have a number of princling dependents and guest workers. Saudis will do what their masters tell them to do.
MEFOBILLS
Great post.
Interesting take on Turkey and Assad preventing Israel going north.
Stop making sense.
Yes, the US is trying to prevent a re-alignment of GDP Trading Blocks, i.e. prevent the EU from trading with Central and Eastern Asia, as indicated earlier today*, lest it leaves them out in the cold and Israel having to play an honest game for a change.
* Sun, 12/21/2014 - 12:22-12:48 | 5578212 new noben
All these "Oil predictions" from all these experts forget a major issue in the oil producing world. They are already "rich" and they do not care about the "volume" but the revenue. So if they want $100 million in revenue for a specific time period, they do not care if they have to produce double the volume out of the rigs, they just smash the "little guys" in their supply chains and they don't loose that much. Remember they too have to pay of debt.
It is not like they think like a western country or corporation.
Most of these experts forget that. With all that war over there, they know it is just a matter of time before it goes "bang". They are waitin for last man standing. OPEC will be in tatters below $52.00 anyway, and they are fighting each other now.
Is that his neocon Christmas wish list? Or should I say hanukah?
"The Saudis Fear Western Alliance With Iran"
Bull Shit! Saudis fear the same thing every other Country fears...COLLAPSE!
Despite what the "armchair internet QBs" say we are in collapse and all leaders of all nations have this information.
Obviously not every nation can or wants to react the same.
The one thing that they ALL WILL do is what ever it takes to keep their populations in line. First by coercion then by force.
Give me one good reason why Saudi would reduce production if the future looked so bright that they had to wear shades.
Pretty sure the author of this post knows even less about every subject they mentioned than even i do.
Good Point! and since Conrad Black is not the dean of Credibility(lmao) you might
find the real reasons elswhere, in a other country even! ;)
Wolfowitz doctrine??? Hell, the US couldn't even handle Iraq and it wants to control Eurasia? What the hell do they put in the coffee of those enlightened thinktanks?...
Child's tears
http://www.huffingtonpost.co.uk/2014/12/21/westminster-paedophile-ring-dossier-three-3-mps-peers-house-lords_n_6362270.html
DSK, however, prefferd women's
http://www.telegraph.co.uk/news/worldnews/europe/france/10228438/Judges-denounce-Dominique-Strauss-Kahn-as-linchpin-of-prostitution-ring.html
Before Wolfowitz is was Zbigniew Brzezinski in Grand Chessboard and New American Century. Policies are all predicated on keeping Russia out and America in. If Eurasia forms via rail, money and economic links, then the U.S. is out of Europe. If U.S. is out, then Isra- hells protector is also out. Therefore, Capital markets and Western Central Bankers - including the Saudi's who are part of this system, are in alignment. At the top of Western Banking paradigm is Kabballha following Zionist Bankers, who have large influence in Washington Consensus policy.
Iraq was primarily about the oil, as Saddam was trying to price oil outside of dollars. Saudis agree to sell oil in dollars as that is the Kissinger agreement. Remember the Saudi's came into power in a coup, and were legitimated when America recognized them. In 74 as part of the Agreement, OPEC caretelization was tactitly agreed as being legal, which is why the immediate price bump of oil happened in 74.
The Saudis were helped into power after the 1st world war by none other than St. John Philby, Kim's dad. Interesting history on how he worked with T.E Lawrence until they disagreed on the Israel question. He was the first to bring in western geologists that got the spice flowing.
Let's put all these conspiracy theories aside and settle this once and for all.
The Federal Reserve concocted in secret on Jekyll Island with a cabal of uber secret and wealthy individuals is preparing to raise interest rates. In order to raise rates they need crash the price of oil to help absorb the shock. Yellen said "a couple months" so let's get our crash helmuts on and prepare for tanks in the street and Marshall law.
They ain't raising interest rates. They will go lower first.
Oil is an interest rate.
Smash oil raise fed funds.
Occam's Razor.
You will find that they will go up as countries fight to attract capital and stop their currencies collapsing. Interest rate rises on top of all that debt could be interesting.
It's ,'martial law', not 'Marshall law.'
While I'm sure everyone here appreciates the grammar police keeping us all in line, the terms Marshall and Martial are often mistaken because when people hear "Martial Law" they think of a town Marshall or US Marshall.
So cut people some slack douche bag.
Well, THANK YOU ever so fucking much for educating us poor provincials at length ...
If the bag fits, wear it !
all this time i thought it was.."marchmellow law"...cause it was initially started in "march" the first time to "mellow" the people.....damn you common corp...
I thought it was "Marsha Law", enacted by Marsha Brady, episode #23, "Brady Bunch", in response to some girls being vindictive about wearing wooly sweaters and such.
Marshall McLuhan - Laws of Media
Matt Dillon would disagree.
It's martial law btw, not Marshall law.
From the Israeli point of view it make sense.
Not surprised that the words of a convicted criminal make sense from an Israeli point of view.
"By pumping high-pressure salt water into older wells, some at a depth of three to six thousand feet, an inordinate amount of pressure was built up.
Due to the dangerously high water pressure, the Saudis were forced continuously pump oil until the pressure became equalized.
That process is continuing. If the Saudis ceased pumping oil, they would permanently lose the wells to salt water contamination.
In the current "pump it or lose it" situation, the Saudis are forced to pump at a rate that may take up to five years before they can slow down production rates to pre-glut levels."
FROM: How the CIA Launched the «Financial Pearl Harbor» Attacks on Russia and Venezuela
20 December 2014, by Wayne Madsen (Strategic Culture Foundation)
http://www.strategic-culture.org/news/2014/12/20/how-cia-launched-the-fi...
The key word is older wells. You don't pump millions of gallons of sea water into oil wells because they are healthy. Those wells are dying. In 5 years they may be dead. The House of Saud will implode when that happens.
they have been pumping in that seawater for over a decade
Those wells dont run dry, they may be depleted and the salt water is to get oil from deep near the crust. Those wells, much like the one BP tapped into (before oops oil leaked everywhere) are not made from old dead dinosaurs. Oil is produced in the crust, and is not the limited resource we have been led to believe.
The only thing I got from this article was Saudi are dropping the price of oil, the reason? Shale oil? Iran? U.S? who the fuck knows, wish they would all get nucleur arms and turn the whole middle east into a big parking lot.
A big fat maybe.
We'll know this is true only if and when there really is an Israeli attack on Iran.
I tend to doubt it. At least not anytime soon.
Whatever the source of this oil move, it will take some time for it to play out.
Most Canadians didn't want the pompous windbag back and would have paid you to keep him incarerated in Florida.
conrad is the martha stewart of high finance.
If I ever feel like reading lessons on geopolitics from a zionist convicted felon, I'll let you know. Please do hold your breath for that unlikely event, "Baron" Conrad Black.
Increased production in the West? Like all of a sudden we just doubled oil supply in la quarter? Yeah fucking right.
I have to wonder whether Conrad Black, brilliant and articulate as he is, is biased in favor of Israel here. The National Post is long on presenting Pro-Israel opinion. Black's piece is, however, consistent with the view that ISIS is a CIA/Mossad/Saudi (Prince Bandar) creation, funded by the (Sunni) Saudis and Qatar, trained in Jordan and Turkey, armed and provided intelligence and expertise by the US and Israel, and supplied through Turkey, created to counter the "Shia Crescent" of Iran, Iraq, and Syria, which provides a route for Iran's intended gas pipeline to the Mediterranian coast and then to Europe. Qatar wanted to build a gas pipeline through Syria to the Med and Europe, but Assad in Syria is an ally of Iran and refused the Qataris, so Assad has to go. Russia is allied to Iran and Syria, and opposed the US plan to invade Syria, so the US has used the coup in Ukraine to drive a wedge between the EU and Russia and as an excuse to revive the Cold War with Russia. Netanyahoo of Israel desperately wants the go-ahead to bomb Iran's nuclear facilities, and Russia stands in his way.
The EU tried to extort control and ownership of the South Stream gas pipeline from Russia, so Putin held his nose and re-directed it to Turkey in spite of Erdogan's insistence that Assad must be removed. Assad does not seem to be moderating his anti-Assad position, but is increasingly anti-EU and anti-Nato although Turkey is in Nato. Assad just asked Russia for $3 Billion and was refused. Maybe Putin is backing off his support for Assad after all, but Russia has a naval base on Syria's Med coast and Russia will not want to lose that, so maybe a settlement will be reached whereby Assad resigns in favor of someone less hated by the neighbors but still acceptable to Russia and Iran (if that is possible).
Black's piece is also consistent with the recent story that John Kerry went to visit the Saudi leader and persuaded him to crash the world price of oil, just before the Saudis did so.
Then there is another story I saw today that maintains that the CIA, apparently to trap the Saudis into over-production and hence price reduction, talked the Saudis into injecting sea water under high pressure into their failing oil fields to increase production (over the last few years) and the Saudis now do not dare reduce production because to do so now that sea water has been injected would impair future production. Sounds strange, but maybe an oil geologist could explain this.
According to Matt Simmons before his untimely death in 2010 the Ghawar oil field in Saudi has been injected with water for a long time. Simmons estimated the "water cut" was running at over 50% and it can only have gotten worse since then. With such a high water cut, one can assume that the easy oil is exhausted and the well has peaked. What's left is heavier oil which requires high pressure water to get it out. I'm not an oil geologist but I believe it's right to say that high pressure water causes progressive damage to an oil well and the extraction costs rise accordingly. One risk is that the well collapses due to water pressure damage.
I therefore think that one other factor in Saudi's current antics is to influence M/E politics to get what it wants while it still has some leverage, because once Ghawar goes off line, Saudi is just another Arab country run by an evil, extremist, despotic regime. In fact, it's already one of those(!)
I am still waiting for the United States government to withdraw from the world. 1000 military bases in 100 countries. Involved in many wars and occupations, drone programs.
It would have as good an effect as the United States law enforcement withdrawing from United States society. A whole lot less senseless killing and choking to death, no more war on drugs. It would be awesome.
Lord Black?! Lord Black of Crossharbour?!? Is that really you Sir!
Oh thank God you're back!
Do you still wear your poofy red and white robe when you write?
Feck off and take Lady Saggy Tits with you.
+1 for "ineluctable exploitation"
Timesaver : Ineluctable definition, incapable of being evaded; inescapable: an ineluctable destiny.
It has been a while since I stumbled a completely new word on ZH. Give this author some points leading to his ZhD defense.
Meanwhile this is yet another manifestation of an oil soaked butterfly spattering any swans roaming the oil fields.
OT but in line with these global pertubations: Did you know that Swans were prized as a Christmas meal - here is the procedure in case you want to try this at home. Hint : you need to start in June so it is a bit late this year. Come to think of it - that is when the oil / oil currency crisis started. Maybe it will end with the oil soaked swans on a spit before the holiday fire. :-)
http://foodhistorjottings.blogspot.de/2013/08/a-swan-supper-on-thames.html
I think it's time for me to read Catch-22 again...
repost
"..Saudi Arabia is trying to discourage the use of Iranian and Russian oil revenues to prop up the blood-stained and beleaguered Assad regime in Damascus.."
This sentence underlines best the monumental stupidity of the author.
I agree. The article represents the author's view about complex matters, nothing more.
He may have hit most of the right buttons regarding the oil price collapse but he sure has them in the wrong order methinks. According to him, Obola & Co haven't played any part in it. ho-ho.
Look no further than Iranian born Valerie Jarret as to why the shift in policies towards shia Iran and away from sunni Saudi Arabia.
Hey rothschols, ol chaps!
What the heck are you going to command your puppets in saudio rabia to do next with all that oil you have historically owned there? When will you stop pulling the strings of fear on so many billions of people, world-wide? Like, for reals dewd. WTF, over? Can you spell, Love?
Hows about turning coats and coming over to the wining side for a real change? Stop all the warmongering profiteering for world domination and population elimination. Put your stock into prosperity and human advancement, instead of it's decline. Awwww come on...!
Please recognise the voice that is trying to save you from the lampshade and boots company.
Do not address Lord Rottenchild in such a manner, and don't forget about the soap.
This guy seems to be an employee in Langley and he seems to write on behalf of Tel Aviv.
Article smells a bit off to me! Happy Xmas and new years everyone.
Quite stupid article.
Low oil price did not alter Russia position on Ukraine at all.
Nice theory, but I have better one you won't find on CNN.
What if this is simply prelude to collapse of US influence in Middle East and elsewhere. We are witnessing mysterious economic, financial and political movements, nobody understands. World supposedly grows faster and faster, population increases but demand for food, oil, gas and electricity collapses everywhere, even in China.
World trade’s collapsing by any measure for years now but most importantly, US share in world trade is collapsing even faster. De-dolarization process’s swiftly developing, including in countries like France, UK and Swiss, and Russia, India where non-US transactions, along currency swap lines, will no longer denominated in US dollars. Non-dollar world wide banking institutions, rivaling IMF/WB are raising, various China centered trade and cooperation organizations are being established with no or marginal participation of US, while TPP, TTIP, Doha, disintegrating as we speak.
May be collapse of oil worldwide demand and growing unspoken yet, political conflict between Saudis and US, caused Saudis to drop charade of market price balance at $100 which was a lie anyway, and try to sell some oil for a change under cover of attacking Russia.
May be sudden inexplicable, so far, silent alliance between Saudis and Israel is a symptom of lost trust in American power and loyalty or coincidence of interests with their own. The relationship between US and Saudis and US and Israel is worst in decades, and do not blame it on Obama, since he is only a puppet in oligarchs hands. So in this context, are Saudis aiming to destroy shell oil Ponzi scheme in US, and sand oil in Canada as well, trying to shoot many birds with one bullet?
Look at US relation with Turkey NATO member, coldest in decades after US tried and failed to cook up Arab spring in non-Arabic country against “friendly” government (neocons bad), warming up relations with Russia and refusing to impose any sanctions, increasing trade instead, including gas/oil. On the other hand we hear sudden overture of Europe to Iran, dropping axis of evil mantra, symbolically/materially support Palestinians while their friend Israel pounding them. What’s going on? Is dramatic shift in Israel policy coming up, on the scale it happened, when in 1967 pro-Soviet socialist Israeli state switched sides? Or it’s just positioning in soon arriving post American age?
The fact is world economies have been so badly injured by global banksters and oligarchs greed that rigged commodity markets are held artificially high only to satisfy derivative speculation while real demand collapsed due to crumpling standard of living most everywhere in the world over last 10+ years at least.
I do not know, but may be the increased aggressiveness of US and its puppets during lat decade at least, toward its friends and foes alike, continuous military failures and political destabilization they cause, economic self destruction and debasement of its reserve currency, make US subordinates to rethink their strategies for the future. Time will tell sooner then later.
I have a friend who is absolutely horrible with stocks and trading. He is a price chaser after something has moved very far. And he is a blamer when things go bad. So much so that I can't tell him what I am doing for fear he will follow me into a trade. No matter what I do, he will always get killed trying his own twist and I end up being blamed for it. Well, he bought a bunch of stocks last week. This market is probably entering the last stages or over.
Thank you very much, I've said this all along.
But its more complicated on the Sunni front.
There are three ideologically political manipulations of Sunni Islam today :
1° Saud that controls OPEC and wants Shia theocracy to lose its hold on Moslem regions (Iraq, Hamas, Hezbollah, Syria, Yemen). This rising tide is a reminder that Shia Islam is a bigger threat to Sunni monarchies than Israel. Fitna has always been the bane of theocratic constructs (enemy within). Just read Islamic and Christian history!
2° Qatar has another version of Sunni Islam (Muslim Broherhood) and the tug of war between Saud and Qatar is only too visible in Egypt and by proxy in Libya as well (as in Palestine). Saud and Qatar are at loggerheads about Egypt. One supports Sissi the other ex-Morsi clan of Brotherhood. A lot of bad blood still and its tearing apart the Gulf Council, with EMirates supporting Saud (not Qatar).
3° Turkey has its own version of Islam with Erdogan who wants to resuscitate Ottoman supremacy on region.
All this has allowed the ISIS to emerge and it could topple the Sunni monarchies down the road it they stay divided.
Pax Americana now has a position which is in tatters; trying to solidify Iraq, appease Iran, not alienate Egypt, console Saud and bring Qatar to the GC table. Its undoable as the neo-con mayhem of past has destroyed all consesus around Potus. So we should expect a reduction of US efficiency and plays in ME.
WHence Saud's increasing role on Oil's short term manipulation today.
What is not clear is if the current Saud Oil policy has the blessing of Potus or not.
The Shale plays are more Republican Oligarchy ones (Bush + Koch +Oil Lobby) than Democrat.
Time will tell as this plays out. But the ME will be an increasing can of worms !
PS / Related to Oil price but not to Saud, here is an interesting take on Oil price :
http://wolfstreet.com/2014/12/21/did-the-fed-trigger-the-oil-price-plung...
A very good breakdown of the individual political, monarchial & theological interests involved across the region falak.
Well done, +1.
Conrad Black is a nasty neocon. He poses as an erudite writer but he's just a claptrap rhetorician. His worthless pieces should be kept out of Zerohedge.
you mean Baron Black of Crossharbour the same douche wou just got out of jail after serving 4 years for fraud .
this shit is pure comedic neocon gold! fuck the subfecal neocons! right in the throat!
P < P + I
I have always been fascinated by Saudi Arabia's internal politicis which are largely a black box to any media or external sources. I do have to wonder if this move isn't because King Abdullah's hold on power isn't what it once was (he was a US/UK guy all the way just like his father Fahd) and if those in succession who have no real ties to Abdullah/Fahd have decided that Saudi Arabia's interests increasingly don't align with the US.
Take steps like this and even if necessary and the US approves the Iranian nuclear deal (which is for all intensive purposes dead in his current format), that they will seek to go nuclear and quietly start working on acquiring nukes from the Pakistanis (or even the Israelis) as a fall back so that if the Iranians continue declare they are suddenly a nuclear power that the Saudis almost simultaneously declare their nuclear capacities too.
Even with the nuclear agreement in place I don't see why the current Iranian leadership won't stop working on a nuke. They saw what happend to Saddam in Iraq and Quaddafi in Libya. Stretches all the way back to really Noreiga in Panama which was the first head of state the U.S. replaced at the end of the Cold War in '89. Only thing to potentially prevent that is having a nuke as a triumph card. Why the US saber rattling towards North Korea has been tame with a few exception of neocon nutjobs like Bolton.
Just about this whole paragraph is Fox news level nonsense. Hezbollah is a defensive force that prevents the Ziopaths from walking into Lebanon, anexing it to the Litani, and expelling its people. There is little good to be said about Hamas, but Israel was unquestionably largely responsible for its creation, when it tried politics, it was blockaded and attacked, and for every Jewe they've killed, Israel has killed perhaps 100 Arab civilians - all while using Jewish quasi-control of the MSM to Orwellize the facts.
http://electronicintifada.net/content/netanyahu-government-knew-teens-we...
http://original.antiwar.com/justin/2014/07/08/who-started-the-cycle-of-v...
https://www.youtube.com/watch?v=iXRO1YFreNA&list=UUEHsSWvrGVSIA63OV3J6vh...
This misrepresentation of who started violence has been repeated over and over - and is only possible with Jewish media ownership and influence, and a fear of "offending" the Zionists with.... the truth.
http://antiwar.com/blog/2014/02/06/the-truth-about-cease-fire-violations...
http://antiwar.com/blog/2012/11/11/israels-latest-assault-on-gaza-the-li...
You have a colonialist, supremacist occupying power currently seeding occupied land with Jews who think they are the "Jews" of the Bible and have a g0d given rght to the land, using the latest in advanced military hardware against stones and home made rockets - and the miracle of it all is how deep the stupidity and/or racism of people like Conrad Black truly goes.
Netanyahu has cried wolf on Iranian nukes for 20 years - "months away" for 20 years means he's lying - he wants regime change and the destruction of infrastructure. Like other Jewish Supremacist Ziopaths he would be happy to see hundreds of thousands of dead civilians if it meant no one could resist planned Israeli expansion, or compete with Israeli gas or nuclear technology.
If Black has intel regarding an actual nuclear weapons program in Iran, contrary to the assessment of US intelligence, and contrary to the inference one must make from faked evidence, such as the "laptop of death" - he ought to inform the DIA.
If not - he ought to shut his fucking trap and worry about the drip drip drip of Palestinian blood, and a press that won't cover it for fear of offending people who simply don't care about the lives or deaths of people if they're the 'wrong' religion or ethnicity.
http://www.4thmedia.org/2014/12/israeli-role-in-syrian-conflict-brought-...
Correction. . . . IsraeHell (the Mossad) created Hamas.
"the obdurate failure of most Western commentators to understand the implications of the oil price reduction, are an unflattering reflection on the financial and political acuity of the pundits of our society."
He got that much right.
Actually the sentence in his article shoud read:
This post is an unflattering reflection on the financial and political acuity of the pundits of our society.
"Shale-sourced oil is relatively environmentally friendly".
Relatively, when compared to oil drills in Nigeria where yearly oil spills the size of Exxon Valdez happen yes, but otherwise not. He makes relatively sound like it is less bad.
Conrad Black and the National Post. Canadian mainstream media neocon drivel. Really now, trolls excepted, ZH readers are not that stupid.
Edit: you can tell his mummy sent him to an expensive school though, lots of big words to try and make up for the bullshit content.
RIGHT ON!!!!!
Actually a friend with some small connection to Royal family in UAE said this.
Arab kings are having problems collecting their savings from US. Financial systems implemented moves all revenue into US instruments.
Arab kings did not spend the money on ISIS. But it was US which uses Arab money to train, equip, transport, and command ISIS and other terrorist groups.
Saudi is now making moves to sell additional oil to new buyers and hope to get additional money directly to their own pockets.
It is all about money.
So says my friend.
Actually a friend with some small connection to Royal family in UAE said this.
Arab kings are having problems collecting their savings from US. Financial systems implemented moves all revenue into US instruments.
Arab kings did not spend the money on ISIS. But it was US which uses Arab money to train, equip, transport, and command ISIS and other terrorist groups.
Saudi is now making moves to sell additional oil to new buyers and hope to get additional money directly to their own pockets.
It is all about money.
So says my friend.
"It is all about money."
No shit, Sherlock . . . .
Shale sourced oil is relatively environmentally friendly? Where the hell is this guy getting his information from????? BTW - I have read that US companies have convinced the Saudis to frack many of their older wells using seawater and they are now trapped into pumping at current rates due to being in a "use it or loose it" mode as the wells would become contaminated if they stop or slow production. This may account for part (or all?) of their publicly stated refusal to reduce output.
Jew-baiting Saudis??? A lot of this post is (Neo-con) propaganda BULLSHIT . . . .
Anyone paying attention would have realized long ago the Iranian nuke talks are a fraud. The US has plans to release their idea of a settlement with Iran but its essentially the proposal Iran came out with 6 years ago. We've already scaled back the sanctions so the Iranians can finish their refinement program. The only thing slowing everything down is finding the right spin to make it like the Obama diplomacy generated some sort of result other than Iran's original proposal.
It's a Good Thing that nobody in Russia can read English otherwise they might learn about this cunning little plan.
US greed crashed the oil price.
What a load of self serving delusional nonsense. Get this straight: Iran will never ever get close to the west ever again, let alone get into an alliance against anybody. The reason is simple enough; the west CANNOT BE TRUSTED, IS A SERIAL BETRAYER AND WILL TURN ON A 'FRIEND' IN A HEARTBEAT. No sane Iranian leader who wants to survive politically in Iran would EVER consider such an alliance. Black is full of it..typical know it all neocon.
Whatever the details of their strategy, I think most would agree the drop in oil prices is primarily the result of a master plan. Countries run by kings, dictators, and omnipotent leaders (not to mention central banks) can do that sort of thing more easily.
But, don’t overlook the likelihood that just like the Fed’s master QE plan, it will still fail miserably to achieve the intended results.
It's not Iran! It's Qatar. Obama is partners w/Qatar Emir Tamin and Mullah Mohammed Omar! I thought everybody figured that out by now! Mullah Omar is the Taliban chief in Qatar now weakening Pakistan so they can have NUKES & Missiles. Watch it happen. Obama is a partner!
Like I have said before, there can be any number of reasons for cheap oil. Whichever one is letting me buy $2.00 a gal. gas I hope it keeps up for years. The consumer has been getting screwed for years by the Takers.